Another Day Closer to the ECB Press Conference
September 4, 2012
The dollar is unchanged against the euro and Swiss franc, up 0.1% versus the yuan and sterling, and up 0.2% against the yen. The weakest majors have been the Australian and New Zealand dollars, against which the greenback is 0.5% and 0.4% stronger.
There’s been a leak of a closed door Draghi briefing to the EU parliament, claiming ECB readiness to buy sovereign national bonds up to a maturity of three years. The leak of such confidential information could produce recriminations and even affect the dynamics of the Governing Council meeting. Market reaction has accentuated the positive, and peripheral bond yields are lower. Share prices in Spain and Italy are up 1.3% and 0.4%, while those in Britain, France and Germany have fallen by 0.7%, 0.5%, and 0.3%. ECB Pdt Draghi’s press conference is set for 12:30 GMT.
The Moody’s credit rating agency
- Changed the EU sovereign rating outlook to negative from stable.
- Urged Japan’s government to end the political gridlock in the upper house of the Diet, lest paralysis hurt that economy’s credit rating.
The Reserve Bank of Australia left its key interest rate at 3.5% for a third straight time. The last change, a cut of 25 basis points, was made at the June monthly meeting of the RBA Board.
Share prices in the Pacific Rim fell by 0.7% in China and Hong Kong, 0.6% in Australia, 0.3% in South Korea and Indonesia, 0.2% in Singapore and 0.1% in Japan. Equities were steady in Taiwan and firmed 0.2% in New Zealand.
Oil and gold prices increased 0.7% and 0.4% to $97.12 per barrel and $1694.30 per ounce.
Japan’s monetary base grew 6.5% in the year to August, down from 8.6% in July but up from 2.6% in the year to 2Q12. The Bank of Japan’s balance sheet rose to JPY 150.0 trillion at end-August from JPY 145.5 trillion at end-July and JPY 143.6 trillion at midyear. Japanese labor cash earnings recorded an on-year drop of 1.2% in July, four times greater than expected, after falling by 0.4% in the year to June.
Australia’s seasonally adjusted current account posted a AUD 11.8 billion deficit last quarter, down from AUD 13.0 billion in the first quarter but much higher than the AUD 7.4 billion deficit in the second quarter of 2011.
Euro zone producer prices climbed 0.4% in July, thanks to a 1.6% leap in energy costs. Other producer prices edged up just 0.1% and 0.9% on year. Year-on-year PPI inflation ranged from 0.9% in Germany to 2.4% in Italy, 2.6% in Spain, and 4.1% in Greece.
Swiss GDP unexpectedly contracted by 0.1% in the second quarter, the first drop in three quarters. On-year Swiss growth was more than halved to 0.5% from 1.2% in 1Q12. Personal consumption growth was only a third as much in 2Q as in 1Q. Business spending was unchanged, and exports fell more sharply than imports.
New car sales in Germany were 4.7% lower in August than a year earlier. Romanian retail sales rose 4.6% in the year to July, while that economy had a 5.7% rate of PPI inflation in the same month.
Same-store sales according to the British Retail Consortium were 0.4% lower than a year before in August. That was the first drop since April. Total sales posted a 12-month advance of 1.6%. The U.K. construction-sector purchasing managers index of 49.0 in August followed 50.9 and was the second lowest in 2-1/2 years.
Vietnam’s manufacturing PMI index improved 4.3 points to a reading of 47.9 in August. Consumer confidence in Thailand edged up to a reading of 68.4 in August from 68.2 in July.
The United Arab Emirates non-oil purchasing managers index printed at 53.3 in August, similar to July’s 53.4 reading and June’s 53.2 score.
Commodity prices in New Zealand increased 0.5% in August, offsetting a drop the month before.
The U.S. manufacturing PMI and construction spending will be released today. The Democratic Party national convention begins as well.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Australian current account, Draghi, PMIs